How Schools Can Manage Total Cost of Ownership for Tech

22 May 2024 | By viviedu

Ready to upgrade your school’s technology without stretching your budget? As education leaders, you face the tough challenge of balancing tech upgrades with tight spending. It’s not just about the initial price—the key is understanding the total cost of ownership (TCO). This involves considering not just the upfront costs, but all expenses throughout the technology’s lifecycle. Smart, strategic decisions about technology investments start here, with a clear view of TCO ensuring that your investments advance your educational goals and stay well within budget.

Understanding TCO: A quick primer

What exactly is Total Cost of Ownership (TCO)? It’s the full tally of costs, both seen and unseen, that you’ll manage throughout the life of your tech. From the day-one price tag to the ongoing costs for maintenance, support, training, and infrastructure—it all counts. Mastering TCO not only sharpens your budgeting skills but also prepares you to face future costs head-on, keeping unexpected expenses at bay. Strategic handling of TCO helps you make smarter, more informed decisions, ensuring your technology investments truly pay off.

Components of TCO: What to consider

Understanding TCO fully means breaking it down into its key parts. This clarity helps you see the whole picture of your spending, empowering you to make more informed and strategic financial decisions:

  1. Upfront cost: This is the price you pay upfront to acquire a technology solution (list price less any discount). This could be a one-time purchase price or a recurring subscription fee.
  2. Hidden or variable costs: Unforeseen expenses that may arise during implementation or usage, such as for set-up or overage.
  3. Maintenance and repair: Costs associated with keeping the solution operational and addressing any issues that might arise, including compatibility, fixes, etc.
  4. Professional development or training: Expenses related to training staff to effectively use or support a technology.
  5. Support: Fees for ongoing technical support and user assistance.
  6. Infrastructure costs: Hardware, software, and network infrastructure expenses required to support a solution (not included in the ‘list price’).
  7. Staff costs: The personnel expenses involved in managing and supporting a technology solution.

According to Deloitte, companies typically allocate about 57% of their IT budget to operating existing systems, and only 19% on building innovative new capabilities. This distribution highlights the challenge of managing costs effectively to support both maintenance and growth initiatives.

Real-world scenario: Upgrading classroom AV technology

Imagine your school district ready to boost classroom interactivity and learning environments with new AV technology. You’re considering interactive flat panels (IFPs), TVs enhanced with Vivi, and projectors. In addition to comparing features, it’s essential to fully understand the long-term financial implications of each technology before making your decision. The cost of IFPs on a rolling cart can vary significantly, based on factors like panel size and volume discounts. Additionally, training and installation costs can add significant amounts.

To do a cost comparison, you’ll want to gather your initial cost for each along with any ongoing costs for associated software, professional development and training (in-person or virtual), device management/MDM software, technical support and maintenance, and infrastructure upgrades. Then, you’ll want to consider these costs on an annual basis.

To make it easier, we’ve put together a user-friendly TCO Calculator. With this tool, you can input typical costs and project the total investment for up to 8 years—aligning with the typical lifespan of a display. It allows you to weigh the financial impacts of various tech upgrades comprehensively, ensuring your decisions support your educational goals and stay within budget limits, all while avoiding costly surprises.

Comparing technology investments to guide decision-making

Sometimes, the cheaper option upfront can end up being more costly in the long run. By evaluating all associated costs over the technology’s lifecycle, you ensure that your choice not only fits your budget but also avoids future financial surprises, leading to smarter, more strategic decisions and better returns on your investment. Still skeptical? Forbes highlights compelling reasons and methods for using TCO and ROI assessments to guide you towards smarter investments and more efficient operations.

Make strategic IT Decisions with confidence

Start implementing total cost of ownership calculations in your tech purchasing decisions today! Check out the Vivi TCO Calculator.

Want to read more? Check out CoSN’s best practices and emerging trends in TCO analysis.